A few years ago, before seed investing was as well defined as it now is, I co-hosted a bean bag sitting circle at The Lobby on the topic of “the seed round.” While I assumed the topic would appeal primarily to founders thinking about their next startups, we had a surprising number of industry players — the large monolithic cash hoarder and sizzle brands that buy so many startups, early and late. Their comments on seed investing ran to “you seed guys should fund more companies, because even if they don’t work out we’re going to buy them and you’re going to get your money back.”

As an institutional seed investor, when I fund a company, the decision is heavily, but not exclusively, weighted toward the team. Reality has taught me I need five things: people, people, people, a great idea and a huge market if it works.

The quality of the people behind the idea is paramount. I fund entrepreneurs I believe will travel the 10-year-plus path to outsize outcomes. But there have historically been opportunities for those whose journeys end in acquisitions by major players aimed at landing the top-tier talent, commonly known as acqui-hires by the beanbaggers at my session. Investors recover their money, and the talented team has a new career at a meaningfully elevated level from when they left the corporate world.

On its face the concept seems logical — we fund the best and brightest, and with that money, and hopefully our help, they go on to become more knowledgeable and valuable, as they build an idea from nothing into a company, than they would have if they had spent another year on the job. We empower great people to become even greater.

So, when their ideas don’t work out, the concept of that time and upgrading of talent being compensated through an acqui-hire that pays back investors and rewards the founders with new elevated roles seems like an all-around win — and it was for some time in some cases (though I don’t know a single seed investor I respect that would fund someone with that intention in mind).

The problem is that for all the encouragement to “fund more startups,” when the time comes to buy these teams, the big buyers try to push the bulk of the economics into the retention programs for the team instead of equally across the equity holders in the company. Their attitude is often forget the investors, pay them the minimum to keep them from blocking the deal, and put everything, or almost everything, into a vesting schedule and/or “signing bonuses” for the team.

The worst deals are the ones where the founders put up with these shenanigans, and get the minimum the company will pay. The best deals, in total consideration, come from the founders that fight the good fight and demand that the entire company be paid equitably, and the investors be treated well and get a return. The founder’s requirement forces a higher price and a more equitable distribution, and makes them more in the end, as well.

In addition to this consistent, and I’d argue immoral or at least unethical, practice, acquisitions focused on teams have taken an even darker turn. Some acquirers now feel no need to even pay investors the minimum to pay back their investment. Apparently the time and education the money provided is no longer a factor. We are no longer a source of value add, but a source of cost to be avoided.

A company I invested in recently received a term sheet to get “acquired” by a large portal. There were seven people on the team, all engineers or UI/UX designers — critical jobs for any acquirer — and all had gone through multiple acquisition interviews. The portal wanted them all. The amount they were willing to pay beyond salaries and stock to those hired? About 10 cents on the dollar invested. They weren’t even willing to pay as much to the company or investors as they would have even to a recruiting firm to gain the same people.

So after spending over a year, every week, trying to help the entrepreneurs grow their business and their abilities along the way, we’d receive less than a recruiting service that merely introduced the same level people in exchange for 30 percent of their first-year salary.

I want the best for all my entrepreneurs. Success in their startup is my primary goal for them, but if that doesn’t happen I want them to find a home and a promising path. But I believe that acquisitions should be equitable across the entire extended team, both of founders and investors.

It’s not that investors should come first, but at a minimum they should be treated equally and equitably in the acquisition economics. And if the buyer is merely hiring the team, assuming a cost in line with the cost of recruiting would seem a more logical floor than an amount both insulting and nonsensical.

Talent is a rare and precious commodity in Silicon Valley, and the big players have an insatiable need for it. If they want the support of the seed investing ecosystem to feed that talent to them when the time comes, they should make sure we have a desire to do so, as we are more likely to favor those that do or our own portfolio companies. They’re hiring, too.